MENA Asset Management Survey 2012 - National Bank of Abu Dhabi

Regulatory Trends
External Fund Manager
This is a new concept introduced by the DFSA in July 2010, taking account of
the globalised nature of the Funds management industry. Under the
applicable requirements, a Fund Manager coming from a reputable jurisdiction
may establish and manage a Domestic Fund without having to obtain a DFSA
licence provided:
o It is a body corporate;
o It manages the Domestic Fund from a place of business that is in a
jurisdiction either included in the DFSA’s Recognised Jurisdictions
List or assessed by the DFSA as providing an adequate level of
regulation;
o It subjects itself to the DIFC laws and courts; and
o It appoints a DFSA licensed Fund Administrator or Trustee, who will
be required to undertake certain functions, ie acting as the local
agent of the External Fund Manager to receive process and deal
with the DFSA for regulatory processes, and also to undertake
certain investor relation functions relating to the Fund (such as
maintaining the unitholder register and making the Fund’s
Prospectus available to investors in the DIFC).
Fund Vehicle
Three types of Fund vehicles can be used to establish a Domestic Fund in the
DIFC. These are Investment Companies, Investment Trusts and Investment
Partnerships.
Each has its unique qualities, with the most popular today being the
Investment Company model which is also used for Hedge Funds and Property
Funds, while Limited Partnerships are more commonly utilised for a number of
Private Equity Funds.
o
An Investment Company will need to be incorporated in the DIFC
and the Fund Manager must be a corporate director of the
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